Keystone XL pipeline's cost in South Dakota more than doubles

CALGARY, Alberta, Sept 15 (Reuters) - The cost of the South
Dakota portion of TransCanada Corp's Keystone XL
pipeline has more than doubled to $1.974 billion in the last
four years the project has awaited federal approval, the company
said in a petition filed with the state Public Utilities
Commission on Monday.

The leap in costs from the previous 2010 estimate of $921.4
million is due to factors including the protracted regulatory
process, inflation, currency changes, labour cost increases and
materials storage, TransCanada spokesman Shawn Howard said.

The project to build the 1,179 mile (1,900-km) pipeline to
carry 830,000 barrels per day of Canadian crude from Alberta's
oil sands to the Gulf Coast, is in its sixth year of waiting for
a U.S. permit after running into fierce environmental
opposition.

Howard said the company had not yet revised cost estimates
in other U.S. states that the controversial crude oil pipeline
passes through. The latest total cost estimate for Keystone XL
is $5.4 billion, although TransCanada has said that will be
revised higher once it receives the go-ahead from regulators to
build the pipeline.

"Once we have approval, we are expecting there will be a
material cost increase in the cost of Keystone XL because of the
delays," Howard said. "We just do not know what that (increase)
will be at this point."

TransCanada was granted a permit to construct and operate
Keystone XL by the South Dakota Public Utilities Commission in
June 2010. However, as more than four years have passed without
construction starting the company has to certify that the
pipeline still meets the conditions upon which it was issued.

The South Dakota portion will be 314 miles long and stretch
from the Montana border in Harding County to the border of Tripp
County, Nebraska.

In its petition TransCanada said the five-mile Bakken
Marketlink pipeline, which will deliver 100,000 bpd of light
sweet Bakken crude into Keystone XL, had been added to the
project. The renewed petition was first reported by Argus, a
trade publication.
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